NEW
YORK, October
3 -- The
largest
US bank
merger
proposed so
far in 2015,
that of Royal
Bank of Canada
and
affluent-focused
Los
Angeles-based
City National
Bank, has
since April
been the
subject of a
Community
Reinvestment
Act challenge
by Fair
Finance Watch.

Back
on April 11,
Inner City
Press
submitted a
Freedom of
Information
Act (FOIA)
request to the
Federal
Reserve for it
communication
with and about
RBC and City
National. Only
on September
30, more than
five MONTHS
later, did the
Fed response.
In the spirit
of
transparency,
we are putting
the FOIA
response
online here.

It shows among
many other
things that
RBC was
meeting with
the Federal
Reserve well
before the
public
announcement
of its City
National
proposal; it
has many
redactions
which we will
be appealing,
for example
“When you have
a chance,
please put a
note in our
files
indicating
that we asked
Charles Fleet
about
[REDACTED]
(b)(5) .
Thanks.”

The LA Times
has reported
on the "letter
from the Fed
[which] asks
the banks to
respond to
questions
raised in
written
comments by
[FFW].
Spokesmen for
the banks
declined to
comment....
Fair Finance
Watch, a New
York advocacy
group for
minorities,
questioned a
deal between
the banks in a
June 11
comment letter
to the Fed."

Inner City
Press first
put that Fed
letter online,
here; then
Canada's
National /
Financial Post
reported
without credit
it had
"obtained" it.

By contrast,
in another
pending
proposal, CBSI
- Oneida,
the Syracuse
Post-Standard
disclosed
that "Inner
City Press
forwarded the
letter to news
outlets. Some
of the Fed's
questions
focus on
whether
Community
could
improperly
control
matters at
Oneida in
advance of the
acquisition. Community
is working on
Fed's
questions,
said Hal
Wentworth,
Community's
senior vice
president for
retail
banking."

One common
theme is that
non-control
(and therefore
antitrust)
laws are being
violated. One
difference is
that CBSI does
comment to the
media -- if
only to blame
the messenger
-- while
larger RBC and
CNB do not.
Arrogance?

On
CBSI's blaming
the messenger,
FFW has
commented to
the Fed that
it will "will
comment again
when CBSI has
provided a
copy of its
response to
the FRS'
questions of
July 13.
Beyond the CRA
and
impermissible
“control”
questions
raised
therein, we
wish at this
time to raise
the issues
that, in a
public
response to
ICP's
comments,
CBSI's SVP for
retail banking
said
the following,
in a prepared
statement no
less:

'In a
statement
today, Hal
Wentworth,
Community's
senior vice
president for
retail
banking, said
that Inner
City Press is
not a local
group and
pointed out
that letter
was the only
one filed on
the Oneida
deal. "This
activist does
not do
business with
either Oneida
or Community
Bank."'

If it
would be
inappropriate
for CBSI to
comment on or
disclose
information
about its
customers, in
this context
the same
applies to the
above-quoted,
which,
separately, is
reminiscent of
human rights
abusing
countries
emphasizing
where the
rights groups
who study and
report on them
are based."

"A
commenter
alleged that
in May 2015
RBC and CNB
collaborated
to extend
credit to a
customer of
CNB.
Please address
this claim. In
your response,
discuss in
detail in
detail whether
RBC exercises
a controlling
influence over
the management
or policies of
CNC or CNB
without prior
approval of
the Board. In
addition,
discuss
whether, since
entering into
the proposed
transaction,
RBC and CNB
have
collaborated,
or plan to
collaborate,
on extending
credit to any
other
borrower, and
describe the
nature and
circumstances
of those
collaborations."

“Royal
Bank of Canada
won’t complete
its
$5.4-billion
(U.S.)
purchase of
Los
Angeles-based
City National
Bank for
months, but
the two banks
are already
getting a jump
on doing
business
together.

City National
chief
executive
officer
Russell
Goldsmith got
a call earlier
this month
from a
long-time
customer who
wanted speedy
approval of a
loan worth
hundreds of
millions of
dollars to do
an
acquisition.

“But he was
familiar with
RBC, knew
about the
merger and
asked whether
RBC could help
get this
done.”“The
client knew it
was an amount
of money
beyond what we
would normally
lend,” the
65-year-old
Harvard-educated
lawyer said in
an interview.

Working
closely with
Blair Fleming,
head of RBC’s
U.S. capital
markets unit,
the two banks
signed off on
the loan
within 72
hours.

'It’s typical
of what we
do,” explained
Mr. Goldsmith,
whose
grandfather
co-founded
City National
in 1954 and
whose father,
Bram, is
chairman
emeritus. “We
have a
relationship
[with the
client]. …We
already had
the financial
information.
So we could do
what we needed
to do. On top
of it, having
RBC Capital
Markets come
into it meant
we could do it
with greater
scale.'”

FFW has told
the Fed: This
is entirely
inappropriate
and the FRB
must act,
publicly.
The Federal
Reserve sent
the letter.

Please
note that
RBC's belated
release of
some documents
it improperly
sought
confidential
treatment for
does not
resolve ICP's
FOIA request -
we are
awaiting an
FRB ruling in
order to, if
need be,
appeal. The
comment
period,
including for
the reasons
set forth
above, must be
extended and
on the current
record, the
application
must be denied
and
enforcement
action(s)
taken.

The Federal
Reserve Board
granted FFW an
extension of
the comment
period on the
proposed
merger,
through June
11, FRB
letter here,
due to RBC
improperly
withholding
information
which was
subsequently
released after
a Freedom of
Information
Act (FOIA)
request by
Inner City
Press.

FFW comment on
June 11 - but
submitted to
the Fed an
objection
dated June 6
noting the two
banks admitted
they are
already
working
together on
transactions,
without any
authorization.

This all comes
after the
M&T -
Hudson City
merger stalled
after similar
filings by
FFW, NCRC and
others. On
Royal Bank of
Canada / City
National,
FFW's filing
to the Federal
Reserve says

City
National Bank
is known as a
bank directed
at the (most)
affluent. RBC
is that as
well:

In the
New York City
MSA in 2013,
for
conventional
home purchase
loans, RBC
made no loans
to African
Americans or
Latinos. It
made one loan
to a white
applicant (for
$1.8 million)
and six to
“race not
available”
applicants,
for a total of
over $36
million.

RBC
Bank
(Georgia), in
the Atlanta
MSA in 2013
for
conventional
home purchase
loans made one
such loan to
an African
American, six
to whites, and
none to
Hispanics. In
the Raleigh NC
MSA in 2013,
RBC Bank
(Georgia) made
two loans to
whites, none
to African
Americans or
Latinos.

City
National Bank,
in the NYC MSA
in 2013 for
home purchase
loans, made no
loans to
African
American or
Latino
borrowers. It
made 10 loans
to whites -
none denied --
and 35 to
“race not
available.” By
income, there
were 36 loans
to upper
income
borrowers, and
only one to
the other
income
tranches.

City
National Bank,
in the Los
Angeles MSA in
2013 for home
purchase
loans, made
two loans each
to African
Americans and
Latinos. It
made fully 45
loans to
whites.

City
National Bank,
in the
Nashville MSA
in 2013 for
home purchase
loans, made no
loans to
African
American or
Latino
borrowers. It
made one loan
to a white
borrower -
none denied --
and six to
“race not
available.”
FFW contests
City National
Bank's
compliance
with HMDA.

How is
this
consistent
with the CRA?
For the
record, RBC
previously
bumbled in the
USA with
Centura and
Alabama
BanCorporation.
Now it
returns, only
for the
affluent.
Hearings are
necessary.

Under
the Freedom of
Information
Act, Inner
City Press /
FFW
submitted a

"a
formal request
under FOIA for
the exhibits
that Royal
Bank of Canada
has claimed
are
confidential
and that the
Federal
Reserve has
withheld from
Inner City
Press on its
April 8
response to
Inner City
Press / Fair
Finance
Watch's April
4 request,
including but
not limited to
the 'RBC Bank
(Georgia),
N.A. CRA
Plan,' the
list of
subsidiaries,
information
pertaining to
the U.S.
structure of
Royal Bank."

The
withholding of
this CRA plan
- hearkening
to the Federal
Reserve
rejected CIT's
request to
withhold such
a plan, and
extension of
the comment
period and
holding of
public
hearing(s) -
is outrageous;
it must be
released
sufficiently
before any
closing of the
comment period
such that ICP
can comment on
it. We are
therefore
requesting all
of the
withheld
exhibits
(listed below)

AND all
Federal
Reserve
communication
with or about
Royal Bank of
Canada or City
National since
July 1, 2014.

Beyond the
request for
communications,
including
emails and
text messages,
these
exhibits:

None of this
information
has been
provided, even
the CRA plan.
The comment
period must be
extended and
on the current
record, the
application
must be
denied.

Inner
City Press
previously
reported that
filing by FFW
with the
Federal
Reserve
against
M&T's
application,
that Hudson
City in the
New York City
Metropolitan
Statistical
Area in 2011
made only five
home purchase
loans to
African
Americans,
compared to
hundreds to
whites while
denying the
applications
of African
Americans 3.21
times more
frequently
than whites.

That 2011 data
was quoted by
Bloomberg News
earlier this
month
reporting that
now the
Department of
Justice and
Consumer
Financial
Protection
Bureau are
investigating
Hudson City,
putting the
M&T deal,
also
challenged by
NCRC and
others, in
doubt. Click
here for that,
here
for the NJ
Bergen Record,
also citing
Inner City
Press / Fair
Finance Watch.

But
there's more,
and its worse.
FFW has filed
this
comparison to
2013 with the
Federal
Reserve:

"Hudson
City's record
was even worse
in 2013 than
in the 2011
data cited
above. In the
NYC MSA for
conventional
home purchase
loans, while
Hudson City
made (only)
five such
loans to
African
Americans in
2011, this
fell to only
FOUR such
loans to
African
Americans in
2013, compared
in 2013 to 427
such loans to
whites: a more
than one
hundred to one
ratio, totally
out of step
with the
demographics
and other
lenders'
records.

"For
refinance
loans in the
NYC MSA, while
Hudson City in
2011 made 8
such loans to
African
Americans in
2011, this
fell to only
SEVEN such
loans to
African
Americans in
2013, compared
in 2013 to 801
such loans to
whites: again
a more than
one hundred to
one ratio,
totally out of
step with the
demographics
and other
lenders'
records.

"This is
presumptive
discrimination
and the
reported DOJ
and CFPB
investigations
are entirely
appropriate
and should be
deferred to by
the FRB. What
does this say,
as well, about
M&T's due
diligence and
managerial
resources?"

Why has the
Federal
Reserve not
dismissed
M&T's
application?

The Office of
the
Comptroller of
the Currency,
part of the US
Treasury, is
scarcely
better,
releasing to
Inner City
Press on March
9 a redacted
copy of
Sterling's CRA
presentation,
here.

Now
on April 17
the Federal
Reserve has
asked Sterling
questions
about
inconsistencies
in its
previous
responses, and
about Green
Campus
Partners.
We'll have
more on this.

See here on
the CIT Group
and another
belated
Freedom of
Information
Act response
to Inner City
Press from the
Federal
Reserve on
February 20. Uploaded
exclusively
here,
embedded
below.

Back on August
26, 2014,
Inner City
Press
submitted a
FOIA request
to the Federal
Reserve Board
for CIT's
application to
acquire
OneWest and
for the
Federal
Reserve's
communications
with or about
the companies
since January
1, 2014.

After Inner
City Press and
Fair Finance
Watch
repeatedly
complained
about the
withholding
even of CIT's
Community
Reinvestment
Act plan, and
after the Fed
and the Office
of the
Comptroller of
the Currency
had agreed to
ICP's and
others'
request for a
public
hearing, now
scheduled for
February 26,
only on
February 20 --
seven months
after the
request -- did
the Fed
provide the
responsive
documents,
over one
thousands
pages.

Many of the
released pages
are redacted
in full,
others have
redacts to for
example
sentences
referring to
documents
about CIT's
[REDACTED].
Inner City
Press has
submitted a
Freedom of
Information
Act appeal and
request that
the comment
period be
extended.

But even as
released, and
exclusively
uploaded today
here, the
document show
the degree of
insider
treatment CIT,
its CEO John
Thain and its
lawyers
including
Rodgin Cohen
of Sullivan
& Cromwell
are given by
the Federal
Reserve.

While the
proposed
merger was
only announced
to the public
on July 22,
2014, it
appears in
Federal
Reserve
correspondence
as far back at
April 24,
2014.

On that day,
Michael Lipman
of the Federal
Reserve
Board's
Banking
Supervision
and Regulation
(BS&R)
department
wrote to three
others that
“Based on
details from
the most
recent CIT
April BOD
meeting, there
is a
likelihood CIT
may approach
FRB in the
near term to
discuss an
acquisition of
OneWest NA
(Private,
~$23B in
assets ).
Couple points
[REDACTION]. I
will keep you
updated as
discussions
develop.
[REDACTION].”
Page 1 of ICP
upload;
appealed.

Then in June,
Rodgin Cohen
of Sullivan
& Cromwell
and CIT's John
Thain arranged
to meet with
the Federal
Reserve, to
some it
appears to
receive a form
of
pre-approval
of the
proposal.

On June 24
senior Fed
staff were
asked to hold
time to meet
with Rodgin
Cohen. On June
25, Lipman
wrote again:

“CIT
is meeting
with FRBNY
(John Ricketti
and others)
next Monday at
11am to
discuss a
potentially
large
acquisition.
CIT has yet to
send a
discussion
deck but will
have more
details later
this week
(OneWest
continues to
be the assumed
target: $22B
out of CA).
John Thain’s
secretary has
bee guided to
me to help set
up a meeting
in DC and I am
expecting to
hear from her
by Friday.
That said, it
is also
possible that
they may reach
out to one of
you; CPC
Cheatham is
under the
impression
they have a
different
contact in DC
as well (he is
not sure
who).” Page 6
of ICP
upload.

Later that day
it was said
that “the
meeting with
be in Scott's
office so
space will be
limited.”
Scott is Scott
Alvarez, the
Fed's longtime
general
counsel.

On June 30,
the Fed's
Richard Naylor
wrote to
Lipman, “ I
wouldn’t worry
about any
briefing
material for
Scott. Most
likely Rodgin
will do all
the
talking...”

Scott
Alvarez's
self-described
Gate-keeper
told Lipman
who would
come: “The
Chairman and
CEO of CIT and
6 other
guests; 3 from
One West; 1
from Wachtell,
Lipton, Rosen
& Katz and
2 from
Sullivan and
Cromwell.
Total of 13
outsiders.”
Page 163 of ICP
upload.

So the
“outsiders”
from Wall
Street had
more attendees
that the Fed,
even insider
the Fed.

The Fed's
Alison Thro
put it in
context:
“Rodgin is
coming in to
preview the
proposed
acquisition
because it
will be the
first
transaction to
create a more
than $50
billion
institution
since
Dodd-Frank was
enacted.”

Also on June
30, the Fed's
Elizabeth
Kiser wrote to
Fed economist
Jacob
Gramlich, “I
dug a bit and
found some
materials on
CIT’s
[REDACTED].”
There follow
more than 100
pages of
redacted
material. Page
25 to 149 of ICP
upload;
appealed.

By July 9,
still before
any public
announcement
by CIT, the
project had
been
code-named
Carbon /
Oxygen and the
Fed was
reviewing (and
now apparently
redacting) the
OneWest /
Indymac / FDIC
Loan Loss
Agreements.
These will be
discussed at
the February
26 public
hearing, and
beyond.

Once they
applied for
approval and
groups like
Inner City
Press / Fair
Finance Watch,
NCRC, CRC and
others
submitted
comments in
opposition,
the Fed was
required to
follow its
rules against
ex parte
communications.

But the
extensive
communications
that took
place before
then were
withheld for
seven months,
and some are
still being
withheld.
Watch this
site.